+ What is Fair Trade minimum price? + What is Fair Trade Premium?
Negative point of Fair Trade
What is Fair Trade? The Definition of Fair Trade given by World Fair Trade Organization (WFTO) is “a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South
Basically, Fair Trade is about A better price, Decent working condition, and Fair terms of trade for farmers and workers in developing world By requiring companies to pay sustainable pricesunder the Fair Trade minimum, and Fair Trade premium.
What is Fair Trade minimum price? Minimum price is the lowest possible price that a buyer of Fair Trade products must pay the producer. It’s cover sustainable costs of Production It’s guarantees that producers receive a price which cover the cost of sustainable product
Coffee Price from 1989-2005 Blue Line = minimum price Black Line = market price http://www.fairtrade.org.uk/
What is Fair Trade premium Premium is the money paid on top of the Fair Trade minimum price. Example 1. Market Price = $1, Fair Trade Minimum = $2 Fair Trade Price going to be $2 + premium Example 2. Market Price = $3 Fair Trade Price going to be $3 + premium This money will be use to improve to quality of producer health, education, environment etc.
Negative Point about Fair Trade Not every producer get help from Fair Trade The producer has to meet with Fair Trade Standards first, to help. It’s not on the basic of need. Sometimes, Fair Trade is use for marketing ploy to get ethically people to pay for it, but in the end only 10% of premium paid go to producer. The other 90% go to retailers.
Negative Point about Fair Trade Fair Trade set up a fix price for the producer, It make them uncompetitive producer. In the long run, it might hold back the economic development. They may unable to get involve in world trade’s competition.
End Thanks for your attention 1. PuvanaiThienpoempool ID: 10024510 (Lead writer) 2. SiddharthBaisoya 3. Rakan